The National Community Pharmacists Association recently
commended
the House of Representatives Committee on Oversight and Accountability for launching an investigation into pharmacy benefit managers, or PBMs, the organizations that health plans hire to negotiate with drug companies and get good drug deals for consumers. The NCPA also
endorsed
the PBM Transparency Act, which Congress introduced to regulate them.
But congressional leaders, such as
Sen. Ted Cruz
(R-TX), the ranking member of the Commerce, Science, and Transportation Committee, have already
given
plenty of reasons to oppose this regulatory overreach. Among the top: the Federal Trade Commission’s data, which prove that PBMs lower the cost of prescription drugs significantly.
Nevertheless, some members of Congress may be tempted to support the bill after viewing this endorsement from the NCPA, the so-called “voice for independent pharmacies.” In reality, however, the association appears to be nothing more than the mouthpiece for pharmaceutical companies. Its endorsement should cause members to run, not walk, away from this legislative effort.
The NCPA’s
receipt
of significant annual donations from the three monopolistic drug wholesalers that handle more than 90% of the United States’s drugs should tell Congress everything it needs to know about this group’s priorities. Far from being innocent actors, these drug wholesalers are facing an
investigation
from 49 state attorneys general for allegedly participating in price-fixing schemes. Yet, not only does the NCPA take their money, but it has also given executives from all three companies a
spot
on the board of its Innovation Center.
If the NCPA really cared about affordability for pharmacies and consumers, one would think it would hesitate to associate with or promote these three companies. But time and time again, it continues to do so.
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For example, when the Centers for Disease Control and Prevention extended the
COVID
vaccination program, the NCPA issued a
press release
urging pharmacies to contact one of four network administrators to enroll in the program. The administrators just so happened to be an NCPA subsidiary or one of three network administrators that the three largest drug wholesalers control. It declined to mention any of the other many market options at pharmacies’ disposal.
Why should anyone buy the NCPA’s arguments about PBMs’ lack of transparency when the association seems to prioritize its personal interests continually over any reasonable transparency standards?
The NCPA doesn’t just appear complicit in the drug wholesalers’ price-fixing, it is also ostensibly involved in price-fixing of its own. In April 2019, the FTC
sued
Surescripts, an e-prescription company that the NCPA has an
ownership stake
in, under antitrust laws. The FTC accused it of “intentionally [keeping] e-prescription customers from using additional platforms … through the use of “anticompetitive exclusivity agreements, threats, and other exclusionary tactics.” According to the FTC, “that conduct resulted in the exclusion of all meaningful competition in prescription, routing, and eligibility, leading to higher prices, reduced innovation, lower output, and no customer choice,” which helped solidify the company’s impressive 95% market share over the e-prescription marketplace.
Is this an organization that
Congress
should feel comfortable deferring to on matters relating to drug pricing relief?
Rather than implicitly trusting the NCPA’s opinion on whether to support the PBM Transparency Act, Congress should look at the FTC’s data, the Government Accountability Office’s
research
, and the
findings
of the former chief economist of the White House Council of Economic Advisers to form its conclusions. It will quickly find that this bill could jeopardize the viability of one of the leading advocates of lower drug costs in this country. That is an outcome that should be avoided at all costs.
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Ashley Herzog is a freelance healthcare writer for the Heartland Institute.
